Maintain long positions. The WTI Crude fell lower yesterday despite an attempted rebound during the intraday session. It closed USD1.90 lower at USD91.76. The commodity opened significantly lower with a gap at USD90.90 and then touched the day’s low of USD90.62. Buying pressure then kicked in to lift the stock higher towards the USD93.36 intraday high – just below the previous close – before selling pressure emerged to drag the WTI Crude strongly lower towards the close. The latest small white body candlestick with long upper shadow suggests the selling pressure remains intact. This is also supported by the weakening of the RSI towards below the 60% level. We expect the WTI Crude to fall lower towards the USD87.91 next support level before potentially rebounding higher. Hence, we keep to our bullish trading bias until the trailing-stop point is breached.

Traders are recommended to maintain the long positions initiated at USD73.79 or the closing level of 23 Dec 2021. To manage the trading risks, the trailing-stop threshold is set at USD87.91, ie the high of 19 Jan.

The immediate support is marked at USD87.91 – 19 Jan’s high – and followed by USD85.41 or 25 Oct’s high. The resistance level is revised to USD93.17 – 4 Feb’s high – and followed by USD95.17, which was 15 Feb’s high.

Source: RHB Securities Research - 18 Feb 2022